Credit markets are overstating TEAM’s credit risk with a YTW of 4.872% relative to an Intrinsic YTW of 3.834% and an Intrinsic CDS of 17bps. Meanwhile, Moody’s is accurately stating TEAM’s fundamental credit risk with its Baa2 credit rating one notch below Valens’ IG4+ (Baa1) credit rating.

Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. That said, as positives, most members of management are material owners of TEAM equity relative to their annual compensation, indicating they may be aligned with shareholders to pursue long-term value creation for the company and most management members have low change-in-control compensation relative to their annual compensation. This indicates they may not be incentivized to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.